Juno will pay $24M to settle the JCAR015 scandal — but don’t expect that to change industry attitudes on reporting snafus

A notorious string of patient deaths caused by Juno Therapeutics’ JCAR015 wound up killing the one-time CAR-T star, derailing their shot at joining the breakthrough race eventually won by Novartis and Kite. Throughout the controversy, though, Juno execs fiercely maintained that they had done everything by the book.

They never budged an inch. Until now.

The company, now a subsidiary of Celgene, as well as former CEO Hans Bishop, have signed off on a $24 million payment to the stockholders who brought a class action suit against the biotech based on their claims that the company had misled investors by concealing the death of the first patient.

Hans Bishop

In the legal actions that inevitably followed, Juno’s execs fought furiously against the claims. And in this settlement, they still aren’t making any concessions on liability. According to the pact, they simply want to settle a lengthy and expensive lawsuit — avoiding a trial — without making concessions on their role.

The Puget Sound Business Journal was the first to report the settlement several days ago.

The timeline on this is important.

The suit noted that the first death caused by JCAR015 initially went unmentioned at Juno, leaving investors vulnerable to the stunning news a month later that a series of deaths forced investigators to stop the trial, with the FDA dropping a clinical hold on the program that blasted their stock price. Then, after one of the shortest pauses on record at the FDA, the agency lifted the hold days later on Juno’s assurances that withdrawing one of the drugs used to prep the patients would resolve the safety issues.

Once the drug was dosed again, though, more patients died, eventually wrecking the effort and leaving Juno to go on to focus on its followup drug, JCAR017, which has impressed in clinical trials.

The money in the settlement amounts to little more than a speeding ticket for Juno and its new owners at Celgene, which paid $9 billion for the company. Twenty-four million dollars is a rounding error for the principals now involved.

Biotech companies are often loathe to publicly acknowledge patient deaths triggered by their drugs. But you can only get away with that largely unscathed if you’re private. Public companies are required to stick to a more narrow path. But making relatively small concessions like this will only send the wrong message to drug developers with a penchant for keeping problems under wraps as long as possible, which also brings to mind Clovis’ recent willingness to settle a probe of its troubled roci program with a $20 million payment.

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